Stakeholders in the information technology (IT) sector have high expectations for the recently announced Rs10 billion package to promote IT and Information Technology Enabled Services (ITeS) in Pakistan, which they expect to reap significant benefits from.
According to the package’s contents, 1% of the total annual export remittances from the IT and ITeS industries will be set aside for the Pakistan Software Export Board (PSEB) each year, allowing it to carry out a variety of projects.
The schemes to be executed by the PSEB include human resource (HR) skills development, capacity enhancement of IT companies, branding, marketing, business development and establishment of software technology parks across the country. The incentive package also envisaged to establish high-level dispute resolution committee to swiftly address tax-related disputes of IT and ITeS industry.
In consultation with industry stakeholders, the Federal Board of Revenue (FBR) is expected to amend and broaden the definition of taxes on IT or ITeS to assure coverage of all IT and ITeS subsectors. Foreign enterprises operating in Pakistan with outbound remittances will also be helped to develop the country’s IT sector as part of the package. Multinational technology businesses’ profit repatriation issues will be rectified in order to encourage foreign direct investment (FDI) in Pakistan’s technology industry and boost the country’s export revenue.
Start-ups and freelancers would be able to open special foreign currency accounts with the help of the government. In comments to The Express Tribune, Si Global CEO Noman Ahmed Remarked said, “The acceptance of the historic grant of Rs10 billion by the finance minister signals yet another landmark success for Pakistan’s IT sector.” This initiative was long overdue, and it is already bearing fruit, as evidenced by the sector’s rapid growth, he said.
According to him, the grant decision also has the goal of increasing IT exports and allocating a specific budget for skill development and capacity growth.
“To effectively profit from this award, we must take inspiration from measures taken by leading countries,” Said added. “With such a large commitment, it is critical to preserve transparency in order to ensure a fair distribution of funds.” He advocated for a phased approach that took into account all long- and short-term objectives, as well as strategies for achieving them.
“It’s time to focus our collective work on specialised sectors for biomedical, weather and disaster forecasting, and technopreneur development, as well as distinct technical zones to attract more foreign and local players,” he said. Cyber-security should also be a top consideration in the allocation process.
The 5% cash reward, one of the major incentives offered through the package, will incentivise small and medium enterprises (SMEs) to declare their exports and add this healthy margin to their profits, said Pakistan Software Houses Association (P@SHA) former secretary general Shehryar Hydri. “This will help quantify and document the fastest growing and second largest export sector after textiles and promote Pakistan as a global hub of technology,” he said.
“We will be seen as a minor market until and until we present confirmed numbers.” He emphasised that the Export Marketing Fund will allow PSEB to move beyond simply organising events and delegations to working with the industry to advertise Pakistan as a desirable offshore destination for international countries. “Foreign companies must feel at ease about repatriating profits in order to increase investment in Pakistan,” he said.
ICT expert Parvez Iftikhar predicted that thousands of new jobs would be created in the IT sector during the next year, and that IT exports would reach $10 billion in three years.
“Once they have gained confidence in the country, they will open offices in Pakistan’s special technology zones (STZs) and work more closely with local players,” he said.
